JOHANNESBURG: South Africa’s rand firmed against a softer dollar on Tuesday, its strongest since the start of the month, in line with other emerging-market currencies which have slowly restored gains after recent sharp losses.
Stocks tracked global markets higher with banks leading gains aided by the stronger local currency.
At 1550 GMT the rand was 1.36 percent stronger at 14.1750 per dollar, up from a session best of 14.1450.
The rand has gained more than 1 percent since October 1, as the U.S. dollar index dropped to more than two-week lows on Tuesday.
“The rand is tracking the direction driven by external factors and the softer dollar, which has provided emerging markets some gains,” said ETM economist Halen Bothma.
The delayed decision of the Moody’s ratings review buoyed the rand to its strongest in a week on Monday, as it is now only expected after the medium term budget policy statement (MTBPS) next week, Dondo Mogajane, the director general of the National Treasury said on Tuesday.
Moody’s rates South Africa’s foreign and local currency debt on their lowest investment grade rung of Baa3, with a stable outlook.
Government bonds were weaker, with the yield on the benchmark paper due in 2026 up 0.5 basis points to 9.165 percent.
In equities, the blue chip top-40 index rose 1.54 percent to 47,007 points. The all share index was 1.48 percent firmer at 53,241 points.
Global markets were calmer, with emerging markets taking a breather from the risk-off sentiment on expectations that Saudi Arabia will acknowledge the death of a missing journalist.
“We still need to see some consolidation in the markets after the big moves seen recently,” said Vasili Girasis, equities trader at BP Bernstein.
Banks were 3.74 percent higher on the back of a stronger rand, led by FirstRand which jumped 4.74 percent to 63.70 rand.
“Banks and retailers have certainly benefited from the stronger rand. There are also some buying opportunities from the low levels that a lot of stocks reached,” said Girasis.
Post Views:
4
Source: Brecorder
